Five Tips to Avoid One of America’s Most Costly Scams

Wire Fraud.

Picture this: You’ve saved $75,000 — your entire life savings for a down payment on a new home. You spent months looking and finally found your dream house. Your offer’s been accepted, your mortgage approved and closing day is set. You’re over the moon.

Before you close, you’re emailed wire instructions on where to send that $75,000 from your Title Company. You follow the instructions perfectly. Days later you find out the Title Company never received your down payment, your entire life savings is gone and that dream home you were so close to making a reality is gone, too.

If that seems far-fetched, it’s not. In fact, 14,000 Americans fall victim to wire fraud every year according to the FBI, and more than $3 billion has been lost since October 2013.

So how can you avoid falling victim to one of the fastest growing crimes? Here are 5 tips.

1.Carefully review wiring instructions. Ask yourself an important question: does the name and location of the wire beneficiary make sense for your transaction? For example, if you’ve been working with XYZ Title Company in Colorado, but the wiring instructions list Jane Doe Title Company out of Florida as a beneficiary, additional verification would be necessary.

2. Verify instructions. Fraudsters are good at creating fake websites, making initial fake phone calls, and hacking email systems. Always verify payment instructions in person or by calling a phone number that is publicly available and listed on multiple sites and resources. Do NOT use the number listed on the wire instructions as fraudsters can easily change that information, so you call them instead of a real representative from a mortgage or title company.

3. Question a change. Hacking an email and changing wiring instructions is a common tactic used by fraudsters. If you received wiring instructions from XYZ Title Company, but then receive a second email notifying you that instructions have changed (.e.g. the company you’re wiring funds to has recently switched bank accounts or banks) this is a GIANT RED FLAG. It’s highly improbable that an organization or individual will switch bank accounts or banking relationships so abruptly and so close to the date of a closing or large transaction.

4. Don’t send money before receiving the product. Fraudsters often try to make you feel pressured to expedite a payment on a deal that is just too good to be true. If you are being asked to wire payment prior to receiving the goods or services, chances are they don’t exist.

5. Don’t ignore your gut feeling. If something doesn’t feel right, don’t be afraid to question it and do the necessary due diligence to ensure you’re making the correct decision. Chances are that doubt will help prevent you from making a costly mistake.

Wires are a safe and efficient way to send money. However, if the threat of wire fraud is too concerning, a good alternative can be to use a certified funds or cashier’s check, especially if you plan to hand over funds in person (at a house closing, for example). Certified funds or cashier’s check operate just like cash, so it may not be the best option if you plan to send your hard earned money via mail, out-of-state or out of the country as it still runs the risk of getting misdirected or stolen.

Have questions? Our expert Fraud team here at FirstBank is just a phone call away.

6 comments on “Five Tips to Avoid One of America’s Most Costly Scams”

The scammers are getting more sophisticated. Be very careful. They are getting into your computer through your email accounts. I recently got an email supposedly from PayPal saying if I was going to be billed $58 a month for a magazine subscription if I did not “unsubscribe” right away. Unfortunately I clicked on a “link” which I thought was to unsubscribe. I don’t know what damage they can do. I could not send the email to PayPal or Bank. It was programmed to keep coming back to me. The scammers are getting more sophisticated. Read every request VERY carefully before touching the keys.

Thanks for sharing your recent experience, Hilda. We’re very sorry to hear about this. You share good advice – read every request or email VERY carefully before clicking on anything. It’s also important to independently verify information received via email with the company who appears to have sent it to you. Unfortunately, it’s very easy for scammers to spoof the name and/or email address to make it appear legitimate.

As long as I wire money from my own bank to a verified bank, are wire transfers safe? Are there any other ways for the money to be intercepted electronically even if the sending and receiving institutions are legitimate?
Thanks.

Hi Maya,
Unfortunately, the issue with wire fraud isn’t necessarily about the bank you’re wiring money to. In most circumstances, the bank is a legitimate, verified institution. But the account number and account holder may not be. It’s important to always verify payment instructions in person or by calling a phone number that is publicly available and listed on multiple sites and resources. Do not use the number listed on the wiring instructions you receive, since fraudsters can easily change that information. If you have further questions/concerns, please contact our fraud expert at 303-231-2007.

I just want to say how grateful I am to Firstbanks Fraud Dept. They helped me recover some money that was taken from my account. I called the phone number. The co. wouldn’t tell me what I allegedably ordered then asked for a copy of my bank account. and email it to them so they could fix the problem. I said are you out of your mind? I called your Fraud Dept. right away. I think they thought because I was old they could get away with it. so thank you First Bank .

I live in the Mountains. I don’t have Firstbank close to me and I don’t want to change because First Bank has been good to me. So I want to stay with you. Just want to Thank You Again.